Best Practices for Contractor Management and Contractor Orientations

We work with a lot of clients to create training materials for manufacturers, including general manufacturing training, industrial maintenance training, health and safety training, and learning management systems to administer, deliver, track, and report on all that training.

Providing contractor orientations is an important aspect of contractor management, but it’s just one element. As a result, we’ve pulled together this quick overview of best practices for contractor management.

Give it the once-over, see what you think, and please leave your own thoughts, suggestions, and insights at the bottom in the comments section.

And don’t forget to download the free guide to contractor orientations at the bottom of this article.

Convergence Training are manufacturing, industrial maintenance, and safety training experts.
Click the links below to learn more about how we can help you.

Seven Aspects of Effective Contractor Management

This seven-phase overview is based on a five-phase overview presented in the National Safety Council/Campbell Institute document Best Practices in Contractor Management.It also matches what a lot of companies do in the real world. As with other materials from the Campbell Institute, their document is very nice and well presented, and we encourage you to read it in full. We’re not going to cover everything they do, and they don’t cover everything we’ll talk about, so it won’t be a waste of your time if you read this article and then read the second article as well.

1. Contractor Prequalification

The first piece of the contractor management puzzle is contractor pre-qualification.

This means carefully checking out a contractor before you hire the contractor to work for you.

There are three main components to this:

Let’s take a quick look at each.

Will you require a prequalification or not?

Most companies DO perform some type of prequalification check and, in layman’s terms, you’re playing with fire if you don’t.

In some cases, companies prequalify companies other for certain jobs that have been assessed as riskier than others.

Will you do it yourself or have a third party do it?

You can do this yourself, but it can be a lot of work.

As a result, there are companies out there who’ll do it for you. According to the Campbell Institute report, 10 of the 14 companies in their study used a third party to do this. (1)

What should you check?

You can check lots of things, not just their EHS record.

The Campbell Institute document offers some interesting insight here. They say that although their study participants have formal guidelines that say pre-qualification should focus on “financial soundness, technical ability, management capability, and health and safety performance,” the factors the companies consider most are “contractors’ management and technical capability, past experience and performance, reputation, and proposed work methods. Environment, health, and safety ranked only about tenth in a list of important criteria in the literature review, and ranked even lowerin the surey results.” (2)

In addition, “A survey of those in the construction industry asked participants to rank the importance of ‘site organization, rules, and policies (health and safety, etc.)’ in awarding contracts. Though this particular factor was never ranked below 13 out of 37 for any type of project, the most consistently highly ranked factor was ‘ability to complete on time.'” (3)

So, that’s not to say companies don’t evaluate safety/EHS when prequalifying contractors, but one might make the argument that it should be considered more of a priority than it is.

But exactly what EHS factors do companies consider during prequalification?

In evaluating safety/EHS, according to Campbell, “all of the members in the study assess contractors on their safety statistics, such as Experience Modification Rate (EMR), Total Recordable Incident Rate (TRIR), fatality rate, DART, and other OSHA recordable.” The companies also check other safety metrics–for example, one “looks at a contractor’s TRIR as compared to an applicable NAICS code, worker compensation claims, injury logs, environmental reports and regulatory citations.” (4)

2. Pre-job Risk Assessment and Task/Job Hazard Analysis

The next aspect of contractor management is performing a risk assessment for the worked to be performed.

Typically, this is done by assessing risk in some type of risk matrix, like the one shown below.

Minor

Serious

Major

Catastrophic/Critical

Very Likely

Probable

Possible

Unlikely

Rare

The risk matrix above considers probability and severity. The Campbell Institute document and survey found companies using other criteria as well, including “severity, frequency, and probability” and “incident likelihood, severity, cost, schedule, security, and other factors.” (5) You can use a risk matrix that seems right for you and includes what you think it should include.

Some companies do the risk assessment for the job before considering pre-qualification, and require pre-qualifications only for work that meets or exceeds a certain amount of risk (while, obviously, not requiring pre-qualification for jobs with lower levels of assesses risk). Other companies don’t base pre-qualification on the risk assessment, but make additional requirements for jobs with higher levels of assessed risk, such as “…hazardous job meetings….job walk throughs…(or exploring) different methods for completing the job.” (6)

3. Contractor Training

Contractor training (different than contractor orientations, which we’ll discuss below) is generally the responsibility of the contractor company. In short, the contractor company should ensure that their employees receive appropriate safety training.

According to the Campbell Institute document, one company “stipulates that contractors are responsible for the training of their employees,” a second company “requires leaders to complete a 30-hour OSHA course and all other contracted personnel to complete a 10-hour OSHA course before beginning work,” and at a third company, “contractors must provide health and safety training.” (7)

Presumably, this is one of the things that’s checked during pre-qualification, so it’s not just injury/illness rates.

In my own real-world experience, which is echoed by what the Campbell document says (9), there are (at least) three ways to do this:

Hold orientations in-person and onsite

Manage orientations via an internal online system, including delivering at least some of the orientation material online

Deliver orientations via an external online system accessible via the Internet (and a contractor-specific username/password), including delivering at least some of the orientation material online

Since this contractor orientation aspect of contractor management best practices is what’s truly in the Convergence Training wheelhouse, let’s take a closer look at this. In particular, we’ll look three things people don’t understand about contractor orientations or some misconceptions related to them.

Misconception #1: You’ve got to do orientations in either “online” or “offline” forms–you can’t do both

One common misconception is this has to be an “either/or” decision, but that’s not true. For example, you can use an online system to administer your contractor orientation, deliver some of your orientation materials online (on your own intranet or on the Internet), and deliver other parts of your orientation materials in person at your own site.

A second common misconception (closely related to the first), is that online contractor orientation management systems do nothing other than deliver online orientation materials. Again, that’s not the case. These systems cover all aspects of administering the training for you, plus you can use them to administer in-person/field-based/classroom-style orientations as well as online orientation materials.

And a third common misconception is that instructor-led, classroom-style orientations are “better” or “more effective” learning experiences than online orientations. Again, that’s not true, and there’s evidence to show this. Research shows that training in any method (such as instructor-led or online) can be equally effective or more effective, depending on the circumstances. And in some cases, online training is more effective than instructor-led.We won’t go into these points in detail here, but if you’re curious for more information, check out the classic book Evidence-Based Training Methods: A Guide for Training Professionals by the highly respected learning expert Dr. Ruth Colvin Clark (the book includes the research-based data I mentioned earlier) and/or read our article that lists some times when e-learning is actually the better choice than instructor-led/face-to-face training.

5. Sub-Contractor Hiring, Management, and Training

Most companies rely on the general contractor to hire, manage, train (or ensure the training) of sub-contractors.

According to the Campbell Institute document, “The majority of research participants (10/14) specify that the general contractor is in charge of hiring subcontractors and managing their safety. In these situations, subcontractors are held to the same standards as general contractors, but it is the general contractor’s responsibility to apply those standards.” (10)

Because this responsibility falls on the general contractor, it’s yet another reason to choose general contractors carefully, and (it seems to me) it’s something that should be vetted during the pre-qualification process.

Of course, all subcontractors should still complete any site-specific contractor orientations, just as contractors do, and as discussed immediately above.

6. On-the-Job Observation

Another standard best practice is some form of periodic observation of ongoing work.

According to the Campbell Institute, this “varies from daily checklists and/or safety talks to weekly walkthroughs, monthly and yearly assessments.” In addition to monitoring real work conditions, the Campbell Institute also notes that “the maintenance of incident logs is also crucial to monitoring contractor safety during a project.” (11)

As you’d expect, most companies have some form of policy for dealing with on-the-job infractions.

7. Post-work Evaluation

Performing some form of evaluation after the work is over is considered to be best practice.

However, according to the Campbell Institute document, although this is considered the right thing to do, it doesn’t happen that often–” Only five [of fifteen] participants have a post-job evaluation or specific guidelines for contractor requalification.” (12)

Some methods of performing these evaluations and/or uses of post-job evaluations include:

Using post-job evaluations when evaluating contractor for future jobs

Assessing safety records of companies at end of year or end of contractor period

Including safety, customer service, and quality of finished work in post-job evaluation

Performing safety and operation inspections for every process change, enhancement, or facility improvement that’s not “routine” and compiling these for the post-job evaluation

Recording all incidents associated with a contractor for use in post-work evaluations

Looking at the number of claims from contractors to determine if work was done safely

Based on the findings in the Campbell Institute document, the post-job evaluation phase seems to be the aspect of Contractor Management that’s most in need of improvement and standardization.

Conclusion: Best Practices for Contractor Management

As you see, this is still a dynamic subject area and best practices are still being formed. But if you make sure you’re covering each of the seven aspects listed above, your contractor management program will be well served.

We invite you to share your own thoughts, experiences, and practices below. What do you do for contractor management? How well has it worked? What have been some big successes for you, some challenges, and maybe even some failures? What are you thinking of doing differently in the future?

Hope you enjoyed this article. Don’t forget to download the free guide to online contractor orientation systems included below.

Online Contractor Orientation Buyer’s Guide

Discover the best ways to deliver, record, and manage your contractor and visitor orientations.

Jeffrey Dalto is an Instructional Designer and the Senior Learning & Development Specialist at Convergence Training. He's worked in training/learning & development for 20 years, in safety and safety training for more than 10, is an OSHA Authorized Outreach Trainer for General Industry OSHA 10 and 30, has completed a General Industry Safety and Health Specialist Certificate from the University of Washington/Pacific Northwest OSHA Education Center, and is a member of the committee creating the upcoming ANSI Z490.2 national standard on online environmental, health, and safety training.